Amherst goes outside town for insurance services

Darrell Cole
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Fraser & Hoyt receives tender over Archway Insurance

AMHERST – Amherst has awarded its insurance services tender to an outside firm and at least one member of town council is steamed about it.

Coun. Robert Bird cast the lone dissenting vote as council awarded the tender for $164,400 to Fraser & Hoyt in partnership with Amherst Insurance and the Frank Cowan Company.

Archway Insurance, based in Amherst, had provided brokerage services to the town for several years. Its bid was second lowest at $177,362 – almost $14,000 higher.

AON Reed Stenhouse’s bid was $178,477.

“I cannot support this motion because I feel we need to support our own,” Bird said, adding he disagrees with how the Atlantic Procurement Agreement is penalizing local companies from bidding competitively for town work. “They have provided us some valuable and good service and the settlement from the downtown fire was more than fair, but because of this agreement our hands are tied and there’s no much we can do about it. Just because that’s the way it is doesn’t mean I have to like it.”

Mayor Robert Small declared a conflict of interest and removed himself from the meeting.

Amherst decided in March to go to the open market to secure insurance services. The decision was made after council questioned why the tender was never opened to the market and after premiums jumped 15 per cent.

All three bids were forwarded to insurance consultant Sigma Risk Management Inc. to examine and evaluate on the basis of compliance with the conditions of the request for proposals.

Bird said he has no issue with the other bidders, but feels Archway Insurance deserved more consideration because of the money it pumps into the community in terms of employment and support for minor sports and other charities.

He said he has long had an issue with the procurement agreement saying it’s obsolete and is based on figures from the 1990s.  He made a point of questioning Premier Stephen McNeil about it during his visit to Amherst last Friday.

“We will find that the town’s cheque will be cashed in New Glasgow and spent in New Glasgow. Take a look at all the signs they have and the teams they support and the employment they support. It’s all here in this town. You take tens of thousands of dollars of someone’s bottomline and it will have to be taken away from little league and other things they sponsor. Because of this procurement decision we can’t make the right decision.”

Coun. George Baker said he has nothing against Archway Insurance, but felt going to the open market was the right thing to do because residents were questioning why the town simply renewed its insurance instead of issuing a request for proposals.

“We need to get the best bang for our tax dollars and make sure we’re getting the best deal possible,” Baker said. “My concern was never with Archway Insurance because I believe they’ve done a great job as the service provider.”

Coun. Frank Balcom understands Bird’s frustrations, but at the end of the day he feels the town has to go with the consultants’ recommendation.

CAO Greg Herrett said all three bidders have the capability and professionalism to provide the services effectively. He said Fraser & Hoyt have insurance services with the Union of Nova Scotia Municipalities and AON Reed Stenhouse was at one time the town’s insurer.

Twitter: @ADNdarrell


Organizations: Archway Insurance, Amherst Insurance, Frank Cowan Company AON Reed Stenhouse Sigma Risk Management Union of Nova Scotia Municipalities and AON Reed Stenhouse

Geographic location: Amherst, New Glasgow

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Recent comments

  • JIM G.
    March 27, 2014 - 09:58

    I agree with Greg and take Councilor Bird's side. How can you not support businesses in town? My understanding is that Archway is an insurance broker which means they shop around the insurance market for the best coverage and price from all the insurance companies. To have 3 brokers doing the same thing is redundant as is to have a consultant advising on issues the broker usually deals with. The only benefit a consultant provides is to ensure the proper coverage is in place in case the broker becomes sloppy or makes mistakes due to internal staff changes or ownership changes which do not appear to be a problem in this case. The other benefit is it takes the responsibility off the shoulders of council. Greg is correct, the bid is low and the rate will increase to near the other 2 quotes by the 3rd year. There should have been no tender which would have avoided getting stuck with choosing the lowest price. Archway could have provided information to council based on their marketing and shown pricing in a confidential manner. Bottom line, town will save $17,000 in year 1, maybe $8,000 in year 2 and Archway will need 1 or 1.5 less employees.

  • Kevin Nelson
    March 26, 2014 - 14:29

    I have to commend council Bird for standing up for local business as for the rest of council you have no back bone and should not be representives for the people of Amherst you show that you do not support business in Amherst thanks for nothing

  • Local guy
    March 26, 2014 - 10:30

    Has everyone clearly missed the opening of this article that the tender has been awarded to a company in partnership with Amherst is this not supporting a local business that employs our residents, and has contributed to the community for many years!!

    • Robert Bird
      March 26, 2014 - 11:51

      “We will find that the town’s cheque will be cashed in New Glasgow and spent in New Glasgow."

  • Jack on the Rocks
    March 26, 2014 - 06:22

    You can rest assured,if this story read"Amherst spends $17,000 more on insurance to keep business in Amherst"you would all be complaining the town was spending tax payers money without consideration..damned if ya do,damned if ya don't...

  • Ken Gouchie
    March 26, 2014 - 01:39

    Where is the "shop local"? Where is the Pride in our town?.. Citizens of Amherst.. Shop local. support your local business and your town. Best buy for your buck doesn't apply, (except for us, your leadership)

  • not surprised
    March 25, 2014 - 21:10

    The mayor and council have been running hard with shop local plan. Here they are handing over a bunch of money to ann outside company for insurance. I guess this means we should start buying everything in other markets?

  • amherstgrown
    March 25, 2014 - 20:56

    I agree with Coun. Bird. Support a local company! Yes taxpayers are asking for the town of Amherst to get more for it's taxpayers buck but I think council missed the ball on that request. I think taxpayers are still upset over the expenses on Victoria square that took what was a beautiful green area that did need some updating and turned it into an ugly cement eyesore of downtown. They way overpaid for ugly kiosks that nobody uses. They put down fancy crosswalks when painted lines would have worked. If I recall correctly most of the supplies were purchased from out of town suppliers. They purchased and renovated a building that was not vacant and had served a purpose only to leave another building empty. They created a position for a former hockey coach with the town. Does anyone know what he does? They post jobs for a janitorial position in the newly renovated town hall, only to hire an out of town contractor. Everything is put in citizen's faces all the time buy local ! Support local business....... How did this decision support local business? How has most of the decisions made by this council and the one before it helped the citizens of this town? The people of Amherst want decent streets in all parts of town. They want decent sidewalks. During the winter they expect town streets to be plowed and salted. They expect the Town of Amherst to support local business as they ask us to do all the time. Maybe i'm uneducated and simple but couldn't the town simply state in the request for tender that if a local suppliers/contractor's bid isn't beat by a certain percentage by an out of town supplier/ contractor that the bid must be awarded to the local supplier / contractor????? Besides......... one thing that wasn't mentioned in this article............ how much did the out of town consultant charge to tell town council to purchase insurance from an out of town provider to save a few thousand dollars? Municipal Governments should be legislated to support local business if they can reasonably compete with outside businesses as long as they aren't monopolizing on the situation.

    • Greg Doucette
      March 26, 2014 - 07:10

      The town does have a local preference clause in its procurement policy, but it only applies to tenders up to $50K. Anything above that amount is governed by the APA policy that Mr. Bird has spoken out against. That trade agreement which applies to all public tenders in Atlantic Canada basically says that you can't give local preference and you have to treat all vendors in the region equally. Unfortunately, the town can't get around it ... But it seems like it would have been a better decision for everyone involved to simply renew with the current provider. I'm curious about the additional cost of transferring the business. Are we really seeing any savings? In the insurance market, the incumbent carrier always has the disadvantage of knowing the actual experience of the client. The other carriers will bid low to get the business, but rates will increase to reflect the true risk and experience. I wouldn't be a bit surprised to see the new carrier's rates rise over the next few years to be the same or more than Archway. I agree completely with Mr. Bird is time to update the APA.